Intel is facing challenges with its new 18A manufacturing process, which is central to its efforts to regain a lead in advanced chip production and compete with TSMC, according to sources briefed on the company’s test data.

The US-based semiconductor company has invested billions in 18A, aiming to produce high-end chips like its upcoming Panther Lake laptop processors at scale in 2025.

However, only a small percentage of Panther Lake chips produced with 18A have met quality standards so far, raising concerns about profitability and the timeline for mass production.

Yield rates, a key measure of manufacturing success, reportedly rose from around 5% late last year to about 10% by this summer, though Intel disputes these figures and declined to disclose current data.

Intel executives said yield improvements are expected monthly, but acknowledged margins will remain under pressure until further progress is made.

The company continues to rely partly on TSMC for some of its chip production.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Intel’s advanced process struggles follow a familiar pattern of delays

The 18A yield problems mirror Intel’s well-documented struggles with previous process generations, particularly the 10nm node that faced repeated delays.

Intel originally promised 10nm production in 2015, then pushed it to 2017, and finally achieved high-volume manufacturing only in 2019 due to persistent yield issues 1.

The 10nm delays were attributed to manufacturing complexity and lower-than-expected yields, forcing Intel to rely on its 14nm process for years longer than planned 2.

These historical delays highlight how yield challenges can derail even the most well-funded semiconductor development programs, with Intel spending billions on process development that took years longer than anticipated to become commercially viable.

The situation suggests that Intel’s approach of introducing multiple new technologies simultaneously—as it’s doing again with 18A’s next-generation transistors and power delivery systems—creates significant manufacturing risks that have repeatedly impacted the company’s roadmap.

2️⃣ Foundry competition intensifies as TSMC maintains technological leadership

Intel’s 18A struggles occur at a critical moment when TSMC holds a substantial technological advantage, being “one to two generations ahead of Intel in the process race” 3.